The ISA deadline for this year is imminent. If you have left things to the last minute, don’t fret. Firstly, it is good that you are utilising your tax-free ISA allowance, as many miss out. If you are looking for ideas on where to invest for your Stocks and Shares ISA then below are some handy stocks that I like at the moment.
The stocks mentioned below were the top four most-bought stocks according to a leading UK stockbroker, Hargreaves Lansdown. The data period was last week, and all FTSE 100 constituents were in the pot. Now, while an in-demand stock isn’t guaranteed to will rise in value, the list does highlight what most people are looking to buy at the moment.
Lloyds Banking Group
Perpetually among the top traded firms in the index, it is no surprise Lloyds Banking Group takes the top spot. Given the share price slump over the past month, it appears that many investors are looking to buy in now at perceived cheap levels. Last week I wrote a piece on why I bought more shares too, which you can read here.
Essentially, the bank has not reported any major issues stemming from the Covid-19 pandemic as of yet. Banking in general appears to be less impacted than other sectors, yet has sold off hard. This could therefore lead to a potential bounce back in coming months.
Oil giant BP is an interesting choice to see at number two in the table. The oil price has been exceptionally volatile, after losing over 60% in value in the first quarter this year. Price wars between Russia and Saudi Arabia have seen large scale disruption in the marketplace. With Brent crude oil trading around $33 a barrel, BP is going to feel the pinch in profit margins.
The firm came out this week saying it expected an £800m hit on first-quarter earnings. It appears investors are buying for the long term here, but I would be more cautious.
Another bank that makes it into the most bought shares is Barclays. In a similar vein to Lloyds, I do get and agree with why investors are buying up banking stocks. The sell-off has been hard on the banks, with many citing that the cuts in interest rates will impact profits. The rationale behind this is that the margin banks make between the rate it lends at versus the rate it pays on deposits has shrunk.
However, I think this has been overplayed. A lot of divisions within the bank will be performing exceptionally well. Think of the lending, debt restructuring, and trading arms. For me, this outweighs the cut from interest rates.
Royal Dutch Shell
While I can’t read investors’ minds, I have a hunch the reason Royal Dutch Shell is being bought is due to the dividend. I wrote a piece recently talking about how dividends are being cut by some FTSE 100 firms. So for those looking for income via dividends, where is safe? Royal Dutch Shell is being spoken of as large enough to continue to pay out. The current dividend yield for the firm is 11.35%.
If the dividend is maintained, this yield looks exceptionally attractive.
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Jonathan Smith owns shares in Lloyds Banking Group. The Motley Fool UK has recommended Barclays and Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.